Jasmine Birtles
Your money-making expert. Financial journalist, TV and radio personality.
Pet Insurance Explained
Annie
29th Apr 2024
Pet insurance has become more popular in recent years as the cost of living crisis impacts household finances and people worry about being able to pay for their pet’s health needs. But how does it work, and can it really save you money? We take a look at everything you need to weigh up before finding pet insurance for your furry friend.
What Does Pet Insurance Not Cover?
Annual Versus Lifetime Policies
Should I Insure My Dog or Cat?
How Much Does Pet Insurance Cost?
What is Pet Insurance?
Pet insurance covers the cost of vet bills for your cat, dog, iguana – any domestic household pet. Vet fees can be extortionate even for small procedures, and often unexpected. Puppies eat things they shouldn’t, cats might fight each other, and illness can strike any animal at any time.
How Does Pet Insurance Work?
Just like your car or household insurance, you pay a monthly or annual fee for your policy. The amount you pay will vary depending on factors like the provider, your pet type and breed, your pet’s age (older animals cost more to insure), how much excess you are happy to pay, and the level of cover you require.
Some vets will require you to pay your bill and reclaim it from the insurance provider, while others will process the claim directly and contact you if the claim is rejected or there is a shortfall (such as an operation costing more than your total cover amount). Check with your vet which way they prefer to do it, as the first option means you’ll need to have a financial buffer saved to allow for upfront payments.
What Does Pet Insurance Not Cover?
There are different levels of pet insurance cover. Basic plans will help you pay for things like emergency operations, accident and legal cover (for example if your dog runs into the road and causes a crash), and small ailments. After that, plans scale up to thousands of pounds of cover per ailment, dental treatment (which basic plans usually won’t cover), and even physiotherapy or behavioural therapy.
Pet insurance usually will not cover the standard annual costs of having a pet. This includes initial or annual vaccinations, the cost of spay or neuter operations (unless there is a complication that arises after), and pet food (unless it is vet-prescribed and temporary for a gastric condition).
Annual Versus Lifetime Policies
Many pet insurance providers give you the option to choose an annual or a lifetime policy type. An annual policy resets each year, and won’t cover things that have been claimed for in the past (for example, if your dog had a stomach bug in year one, other gastric issues will not be covered in future years). This makes annual cover cheaper.
Lifetime cover costs more but will continue to cover repeat costs for recurring health problems, as long as you don’t break your policy by stopping it at any point. You still pay monthly or annually, and the cost will change every 12 months to reflect your pet’s age, but the cover continues for their whole life.
Some insurance policies will also include a death benefit, whereby you will receive the purchase price of your pet on their death (this is not usually available for older animals). This is an extra premium you can add to your policy if you want.
Should I Insure My Dog or Cat?
In the past, pet insurance may have felt too expensive to consider. For example, this writer pays just under £45 a month for a two-year-old golden retriever with lifetime cover up to £7,000 on each ailment. It sounds like a lot, right?
That same dog has, in under two years, racked up vet bills of over £5,000 with a recurring gastric issue and ear infections. Taking into account the £85 excess for the first vet consultation the first time the issue arises, and the cost of plans over two years, that still results in a saving of almost £4,000.
More than that, there is peace of mind that, if the dog seems unwell, a vet appointment is made and tests are done. There is no worrying about whether you can afford the blood test or x-ray to get to the route of the problem – and then further worry about how you can pay for the operation or medication to solve it.
However: insurance is a bit of a gamble. You could have a wonderfully healthy pet that lives for ten years, never needs to see the vet, and you’ve poured thousands of pounds into a policy that never gets used.
If you have a financial buffer, it could be worth putting a large lump sum into a high yield savings account and earning interest from it, instead of paying out for insurance each year. This is especially true if you would only insure your pet on a basic plan, as you would most likely need additional savings to top up a large vet bill.
How Much Does Pet Insurance Cost?
The factors vary so much that it’s hard to put a specific price on pet insurance costs. However, you can get a plan for as little as around £15 per month from some of the most popular providers like PetPlan, if you want the equivalent of ‘third party’ insurance you’d have on your car. This provides legal cover and basic cover for minor ailments.
As your pet ages, the amount will go up. You could find yourself paying £60+ per month for a senior dog or cat on a high cover plan. This is when you should start weighing up whether it would be better to stop paying into insurance and instead keep some savings in an account for vet bills, especially as some insurance policies won’t cover some ailments after a certain age.
You could save money on your insurance with a multi-pet policy which covers more than one pet in the same household.
Save with Vet Plans
One way to ensure your insurance premium stays low is to look at your local vet’s health plan. This will often include annual vaccinations, health checks, nail clips, dental checks, and monthly flea and wormer medication.
Some policies will offer a discount if you’re part of your vet’s health plan, others will not cover certain ailments if you cannot prove that you’ve not taken every step possible to avoid the ailment. For example, you can’t claim for a parasite problem if you can’t prove that you’ve been giving your pet monthly wormer tablets, or for dental work if there is no evidence of regular dental checks.
Vet health plans will usually save you around £100 or more each year on these regular costs, so even if you aren’t going to buy pet insurance it is worth looking at them to keep your pet healthy on a budget.
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